Playing With Fire: California’s Insurance Crisis

What’s Happening with Insurance?

As we know, thousands of homes were either destroyed or damaged in the Palisades and Eaton fires. The total number is still unknown, as the fires are still burning and efforts to survey the damage have barely begun. A rough estimate based on CalFire’s status updates report that over 2,800 structures have been destroyed so far in the Palisades fire[1] and that another 5,700 were destroyed in the Eaton fire.[2] We’re sure to see those numbers rise in the coming weeks as cleanup efforts begin, especially since it doesn’t yet factor in structures that are damaged beyond repair. I think it’s safe to say from these figures that thousands of families are now displaced and will have to find a way forward, starting with finding a new place to live.

The circumstances these families are facing is awful. Unfortunately, it gets worse, because in March of 2024, State Farm announced that it would no longer be covering 30,000 property insurance policyholders who lived in high fire-risk areas. In Pacific Palisades, 1,600 policies were not renewed by the insurance company.[3] This means that the reality for many is that not only have they lost everything, but they are not covered by an insurance plan to help them rebuild.

One such example is Peggy Holter, an 83-year-old retired journalist who lost her condo in the Palisades Fire. She bought the condo back in 1978, so she’s lived there for 47 years, but her insurance was not renewed by State Farm last year, and she hadn’t yet found a new insurance carrier.[4] Just imagine how much value she has lost – she bought a condo in the Palisades in 1978, and it has been appreciating ever since. She has completely lost all her equity and value in her home. That isn’t nearly as heartbreaking as losing all of your possessions, all your memories, and things that are irreplaceable, but practically, it is a huge loss to pay off your home and then to lose all the money you have poured into it, as well as the appreciated value over the years.

The question is – why are companies like State Farm, and many others, leaving California? Why are they stranding homeowners who are left to their own devices to find a new policyholder who is still willing to insure California residents? Well, it will come to no surprise to you that it all boils down, once again, to California policy.

California’s Current Insurance Policies

California has made it incredibly difficult on insurance providers to make a profit in the state. These policies date back as far as 1988, when voters passed Proposition 103 by a slim 51% vote, which was touted as consumer protection legislation designed to ensure that insurance is fair and affordable for all Californians.[5] But, Proposition 103 set up four main constraints on insurers across California, which has led to exodus we’re seeing happen today. Let’s go through them together.

First, it required that insurance companies submit changes to insurance premiums – like an annual increase – to the California Department of Insurance, or CDI, before the rate change can take effect. The purpose of this is to ensure that the proposed increase is justifiable, fair, and doesn’t burden the policyholder without a valid actuarial basis. Originally, rate filing was supposed to be approved within 60 days of submission, but extensions can extend that out as far as 6 months, with some cases even taking over a year.[6] In short, this eliminated the open competition system previously in place, requiring the insurance commissioner’s final approval.[7]

Second, it required public hearings to be held for increases over a certain percentage threshold, so that people called “public intervenors” can make known objections by consumers. The insurance company that is filing for the rate change then has the responsibility to prove what’s in their filing[8] and make the case for why it is all the things I just mentioned it must be – fair, justifiable, etc. Insurance companies as a result work hard to avoid triggering these public hearings, as they can just add to the length of time in the approval process.

Third, Proposition 103 restricted insurance companies from passing on reinsurance costs to consumers. This, in effect, is a price cap.

Let’s pause here and dig into defining a few terms. Insurance is when you pay a company a set amount of money on a recurring basis, known as your monthly premium, for protection against losses in certain events. If the events that are outlined in your policy, laid out by the insurance company, actually happen, then you are guaranteed financial compensation from your insurer to help you pay the costs that that event brought. A common example is if a tree falls on your car, then usually insurance policies have an “act of God” clause, so if you are covered in your policy for acts of God, such as a nature event, then the insurance company will pay for the damages or pay you the value of your car, just depending on what their terms are in your agreement.

As a side note, one misconception about insurance is that if you pay into insurance, that money should be accumulating, and you should get it back at some point. But it’s important to note that insurance premiums are not equity. You pay a company for their service, and the service of insurance companies is stepping up to provide you financial help in the event of agreed-upon situations. It’s a risk mitigation strategy. Those events may never happen, and you just lose the money to the insurance company. Or, those events may happen regularly, and the insurance company ends up paying out way more than they expected to be compensating you within your lifetime. But, when you pay them the money, the money is gone, you aren’t entitled to have it back just because you never needed to use the insurance.

Okay, so now, what is Reinsurance? Well, you and I aren’t the only people who want to mitigate our risk. Insurance companies want to mitigate their risk as well! Insurance companies do exactly what we do – they pay premiums to other insurance companies with the agreement that the reinsurer will provide financial assistance in certain situations. Let’s take an example situation to understand what happens, and let’s make it specific to California. If Insurance Company A has a lot of homeowner policies in high fire-risk areas, then they may be looking at a sizeable amount of risk that they will have to pay out large claims should there be a wildfire. Let’s say there are 1,000 homes in fire-risk areas insured by Company A. If each home has a policy that will cover up to $500,000, then if all 1,000 of those homes burned down, the Company A would be looking at $500 million in claims they would have to pay out. To prevent having to pay out millions of dollars due to one catastrophic event, Insurance Company A may decide to look into reinsurance so that they can make sure they don’t put themselves out of business. So, Company A will go to Company B, another insurance company, and say hey, we will give you 50% of the money paid to us in premiums by our policyholders, and in return, if there is an event that occurs that requires policies to be paid out, Company B will also pay out 50% of the costs. That way, for high-risk homes – whether it be fires, or floods, hurricanes, tornadoes, etc. – pose less risk to one insurance company.

With that being said, companies who buy reinsurance are giving up a percentage of their profits to their reinsurer. Take another example. Let’s say there is a policyholder who lives in an area that is low risk for fires, and that their monthly premium is $500. Because it’s low risk, the insurance company doesn’t need to take on reinsurance, and so each month they make $500 on that consumer’s policy. Now imagine that there is a second policyholder who lives in a high-risk area for fires. The insurance company may decide they need to purchase reinsurance for that consumer’s policy given the higher likelihood they will have to pay out a claim. But if they get reinsurance, let’s just say for 50/50 to make it easy, then if the consumer pays a $500 premium, they have to give up $250 to the reinsurance company. So, now the insurance company has two consumers, being charged the same premium, but they make less money from the policyholder in the high-risk area than they do from the policyholder in the low risk area.

This means that insurance companies are disincentivized from insuring homes in high-risk areas – not just because they have a higher risk of paying out claims, but because they also make less on premiums due to reinsurers. Now, in the free market economy, how would this issue usually be resolved? Normally, if you have a product or service that is more expensive in one area than in another, then those additional costs are passed down to the consumer. Take the cost of a cup of coffee. You may have noticed if you live in or around Los Angeles that the average cost for a latte is super expensive. The coffee shops near me all charge a starting price of $7 for an average latte, without any specialty milks or flavoring. That is far more expensive than other cities in California, or even other states. Why is coffee so much more expensive here than other places? Well, costs are higher here. The cost of overhead and rent in the LA area is high compared to smaller cities or states. The minimum wage is higher here. Even the demand is greater here for things like non-dairy milks or organic ingredients. All those factors mean that to make and sell coffee in Southern California has additional costs attached to it than it does to make and sell coffee in Northern California, or in a different state entirely. This means that coffee shops owners have to set their prices higher to compensate for those additional costs, so that at the end of the day they can still make a profit.

The same is the case with insurance. If a company has to take part of their premiums and pay them out to a reinsurer, then the logical step in the free market says the premiums in those high-risk areas will be higher. Going back to our two policyholders example, if the insurance company charges a $1,000 premium to the customer the high-risk area, but gives away half of it to reinsurance, only then would they make the same amount of money as insuring the customer the a low-risk area for $500 per month.

Proposition 103 prohibited insurance companies from doing that. California is the only state in the country, that since 1988, has not allowed insurance companies to incorporate their costs of reinsurance into insurance premiums,[9] essential putting another cost cap on insurers, on top of the already burdensome approval process to justify rate increases.

Lastly, the final piece of Proposition 103, and the nail in the coffin for California insurance companies, is that it prohibited the use of forward-looking risk assessments, requiring that all proposed premiums must be calculated on historical data, rather than on future risk.[10] This is known as catastrophe modeling, and it differs from historical data alone because it actively simulates catastrophic events that are not limited to those that have happened in the past – like an even worse wildfire than what we have seen in California before. This type of modeling accounts for the fact that historical data, on its own, most likely does not predict the full spectrum of risks that we should be accounting for in the future.[11] Proposition 103 argues that tying increases in insurance premiums to speculative future models is not transparent for the consumer, and so it requires that all rate increases be limited strictly to looking at historical data. Catastrophe models are harder to verify than historical data, and many times the algorithms used by an insurance company is proprietary and therefore can’t be openly shared with anyone who asks, which makes it hard to continue increasing transparency.

To summarize – Proposition 103 was passed in 1988 and requires approval of all rate changes, requires public hearings for changes over a certain threshold, prohibits insurance companies from passing down the cost of reinsurance to their consumers, and enforces the use historical data rather than future-looking predictions when calculating rate increases year over year.

The Results of California’s Insurance Policies

How have all these policies affected the insurance market in our state?

Like I mentioned at the beginning of this article, there has been a mass exodus of insurance companies out of California in recent years. State Farm announced in March of 2024 that it would not be renewing 30,000 homeowner insurance policies, as well as an additional 42,000 commercial apartment policies.[12] They put out this statement, “This decision was not made lightly. The Company takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now.”[13] This makes sense given that State Farm ended 2023 with a net loss of over 6 billion dollars.

But State Farm is far from the only company to begin pulling out of California. Allstate paused new homeowners’ insurance policies back in 2022. Chubb followed State Farm and significantly reduced their home policy offerings in high-risk areas. Nationwide is phasing out its homeowner’s insurance by June of 2025, this year. Farmers Insurance, American National, AmGuard, The Hartford, and Travelers Insurance are all companies that have completely withdrawn from California.[14] But the damage won’t even end with this list, because Insurance Commissioner Ricardo Lara just announced in December that companies like State Farm and Chubb who have scaled back their policy offerings will be required to increase coverage in high-risk areas or else they will not be allowed to continue doing business in California. His statement put it this way, “Insurers will have to start increasing their coverage by 5% every two years until they hit the equivalent of 85% of their market share. That means if an insurer writes 20 out of every 100 state policies, they’d need to write 17 in a high-risk area.”[15] This puts companies like State Farm or Allstate in the difficult position of ceasing operation in California entirely or re-increasing their risk by taking on a significant number of new policies in high-risk areas. Honestly, after the mass destruction from these wildfires, I would expect they would be more convinced than ever to leave California.

What exactly are the reasons for these companies pulling out? First and foremost, the requirement by Proposition 103 to get rates approved by the CDI has added an enormous burden to insurance companies trying to raise their rates. The International Center for Law and Economics found that the average delay in approvals was 293 days, a whopping 9 and a half months, between 2020 and 2022. This made California the worst state in the entire United States for rate suppression, with, “the biggest gap between the actuarially indicated rate and the rate approved by regulators.”[16] Insurance companies, as a result, have not been able to reprice their policies in a timely manner to accurately reflect their risks of fires each year. Insurance companies report that the long rate filing process, which has left them unable to raise premiums fast enough to keep up with rising costs, is a major factor in ceasing operations in the state.[17] Which makes total sense, because why as a company would you continue paying out massive claims if you can’t even raise your premiums to adequately offset your risks? In August of 2024, Commissioner Lara laid out his priority to reinforce the 60-day timeline to reduce these lagging approvals,[18] but even the model itself of having to get your rate increases approved by the CDI means that rate adjustments could still routinely be denied, regardless of if that’s quick or not. Then, of course, the restrictions on reinsurance costs and catastrophe forecasting make it seem impossible for insurance companies to accurately account for the risk they are taking on, even If they could get their rate adjustments approved. Overall, these policies have created an impossible environment that I honestly don’t understand why any insurance company would want to operate within.

This leaves thousands of people uninsured and with little competition to choose from in the insurance marketplace. The more companies that exit the state, the fewer choices consumers have. Those who can’t find affordable private insurance are left to California’s high-risk pool – the Fair Access to Insurance Requirements, or FAIR, Plan. This is a shared risk pool that isn’t state funded but is state managed. Insurance companies operating in California are required – yet again – to contribute to the FAIR Plan proportional to their market share. So, if you as an insurance company write 10% of all policies in the state, you have to contribute 10% of the FAIR Plan’s funding. This fund is then used to provide basic property insurance to homeowners specifically in high-risk areas who cannot obtain private coverage.[19] But, this fuels even more disincentive for companies to operate here, because not only can they not raise their own rates according to their risk, but now they are required to pay into a shared risk pool – one which they won’t receive profit from as the expenses tend to outweigh the revenues, and whatever profit is leftover is usually reinvested in the fund. Not to mention one more fun fact, which is that if there are catastrophic events that drain the fund, the insurance companies who contribute to it are on the hook to pay the extra amount owed to policyholders insured through the fund.

Finally, an unintended consequence of these rate caps put in place by California’s policies have effectively shifted the cost burden to other areas of California and even other states where insurance companies operate to make up the costs of what they can’t charge in California. Research out of Harvard and Columbia’s Business Schools show that insurance premiums are vastly different across states and regions, but higher premiums are often charged in areas where there is the lowest insurance risk.[20] This has completed distorted the insurance market. In fact, researchers found that, “After big losses in those tightly regulated states, such as California, national insurers tend to raise rates in more loosely regulated states. In other words, homeowners in states with weaker rules may be overpaying for insurance, effectively subsidizing homeowners in states with tougher rules.”[21] So even if you think you should have lower insurance costs because you live in a low-risk area, think again; price-controlled states like California may be driving up your insurance costs.

Analysis & Response

What is my response to all of this? I think it’s important to take a step back and acknowledge the difficult balance between the interests of consumers and the interests of insurance companies. Of course, we should want consumers to be protected and able to obtain insurance at reasonable prices. I don’t yet own a home, but I do genuinely hope that when that day comes, that we won’t have our home insurance rates raised by astronomical amounts year over year. It would be a hard situation to struggle to make your house payment because of steep increases in home insurance. At the same time, insurance companies are just that – companies, and in the free market they exist to make a profit. It isn’t wrong or evil of them to increase rates in line with rising costs or rising risks. That is just the nature of business.

The California government’s enactment of price controls over insurance companies is a strategy prone to failure. Setting price controls doesn’t work to actually reduce prices, it just drives competition out of the state and shifts the burden to consumers in other areas without such controls.

But if that isn’t the answer, then what is? What can the government do to help ensure consumer protection and fairness in the marketplace without burdening companies so severely that they no longer want to do business here?

There are a few solutions that our state could consider. The first is the value of competition. Lift the stringent regulatory requirements for lengthy approval of rate increases and allow insurance companies to set their rates in line with their level of risk. This means removing the restrictions on passing down the cost of reinsurance, as well as removing the requirement to use historical data in forecasting. The government should take a hands-off approach to allow companies to accurately reflect the true prices they see as reasonable in their business without government interference. How does this help protect the consumer from massive increases? Well, because competition naturally regulates the market. Meaning, if there are more insurance companies in the market because of the freedom they have here, the more competitive those companies will have to be to get the business of consumers. If your insurance company jacks up your rate to an amount you can’t afford, the beauty of competition is that you can threaten to go elsewhere. When the government virtually extinguishes that competition because they disincentivize companies from being here in the first place, it limits the consumer’s options and takes away the power they have to vote with their dollars. Therefore, the government should remove the regulations that have unduly burdened the insurance industry and let the free market work, as it always does.

Then, the government should acknowledge the role that it plays in increasing the risk of catastrophic fires in California. We discussed this last week. There were several policy failures that led to Los Angeles’ most recent wildfires. These bad policies exacerbated how fast and how large the fires were able to burn. Of course, there will always be areas prone to fire risk, just depending on the landscape and terrain around them, but our government could repeal bad policy and enact good policy to reduce the damage and lower the risk that insurance companies take on when insuring homes in these neighborhoods. Some practical examples are performing regular controlled burns to reduce the area around that could catch or spread fire. Additionally on this note, the government can complement insurance companies in their efforts to get homeowners to reduce risk. They can enact programs that provide financial incentive to implement risk reducing measures, including collaboration with insurance companies to offer discounts or rebates to consumers who meet certain benchmarks. They can also reward homeowners who do not have a history of insurance claims. These types of incentives can even be worked into legislation to guarantee financial benefits to participating consumers.

Lastly, the California government has much room to improve its state fire catastrophe funds. The FAIR Plan is proving insufficient and continuously burdensome on insurers across the state, but the state government could wisely allocate and steward funds specifically for fire relief. Now, this would require an overhaul of the budget – which we should do anyway – so that we aren’t just looking to raise taxes to form yet another line item on the state budget, but it doesn’t mean that it’s impossible or shouldn’t be considered. Our legislature should seriously consider areas of waste in our state spending and reorder its priorities. One of those priorities could be examining how to be better prepared for these disasters. Plus, if the governor has to set and approve a budget each year, and it contains funds for fire relief, that might incentivize him to create better policies to prevent fires in the first place, given he should in theory want to steward the money in the budget well and not spend all the funds allocated to fire relief if not necessary.

Case Study – Florida

When thinking of potential solutions, I thought it might be good idea to consider how other states strike the balance between catastrophe mitigation, consumer protection, and overregulation. After all, California isn’t the only state to face natural disasters that individuals need to be insured against. I don’t think there could be a better example than the state that gets hit with large hurricanes year after year, so let’s quickly examine how Florida handles flood insurance for its residents. Florida is by no means perfect, and they are having their own struggles with retaining insurance companies, but there are some key differences from California that I believe are helpful to consider.

While rate increases have to be approved in Florida as they do in California, insurers can raise their rates before approval and obtain post-implementation review. This is different than California’s system wherein companies are required to obtain the approvals before implementing the change, causing significantly longer delays.[22]

Unlike California, Florida does accept and encourage catastrophe modeling, meaning that insurance companies again can complete forward-looking analysis rather than relying solely on historical data. In fact, in 2024 the government accepted three new types of models created in the wake of recent hurricanes. The Florida legislature passed a law in 2023 allowing insurance companies to even use an average of more than one model when proposing rate increases.[23] They also allow risk discrimination, meaning that premiums can be higher in areas with greater hurricane risk – like coastal neighborhoods. This allows for insurance premiums to actually reflect the risk of the property being insured, rather than forcing artificial equity among all areas.[24] While this can have temporary effects of some areas being more expensive than others, the state has a greater capacity for competition, allowing it to regulate itself as providers work to lower costs and entice consumers to purchase their policies. Lastly, Florida does have state-backed insurance programs that provide relief to homeowners in times of crisis, like the Citizens Property Insurance Corporation, and also funds that provide reinsurance to insurers to help lower costs, like the Florida Hurricane Catastrophe Fund.[25]

Florida may not be perfect, but its approach has been to further support the free market and to steward state funding where possible to help with disaster relief, which is in stark opposition to California’s approach has been heavy regulations and restrictions in rate increases.[26] Florida arguably has a more difficult challenge in front of it, given that it is much harder to prevent hurricanes than it is to prevent wildfires. California can learn from some of the policy positions of Florida’s government, and it can also take effective steps to mitigate wildfire risks – something Florida isn’t able to do as easily.

Concluding Thoughts & The Importance of Policy

At the end of the day, something we must realize is that no government or insurance company will be able to ensure that all costs are equal across the board. Some areas are higher risk, and as a result, will be more expensive to live in. It’s just a basic fact of reality that not all things are fair, and so if you live in an area that catches on fire really easily, and you live under a government regime that doesn’t help to reduce that risk, then it is likely you will have to pay more in insurance than your friends or family who don’t live in similar areas. At the same time, I still believe based on everything we discussed today that there are numerous areas for change on our government’s part that could help to bring back competition in the insurance market and encourage insurance companies to want to do business in California.

This is just another reminder as to why we need to look seriously at and think critically about the laws and policies passed in our state. If you don’t understand that our government and legislature are the ones driving insurance companies out of the state, then it’s easy to just blame insurance companies – they’re too greedy – or to blame climate change – it started the fires! When, in reality, these are all foreseeable side effects of price controls and government overreach, mixed with a severe lack of fire prevention efforts. You need to be equipped to understand the economic effects of laws like Proposition 103, as well as the commonsense outcomes of basic supply and demand. Once you are aware of our government’s role in it, only then will you be convinced and determined to hold our leaders accountable and demand change.

It is completely reckless, irresponsible, and uncaring of our state government to uphold policies that harm citizens and families in their state. They continue to push forward price controls, more government regulation, and burdensome requirements that end up pushing companies away from doing business here. That’s bad for you and for me, and it’s incredibly discouraging for anyone who owns or wants to buy a home here. What are we supposed to do when all the insurance companies I listed earlier have completely phased out of California? What options will we be left with to protect our homes? Will Californians have to pay astronomical amounts just to insure their homes, simply because Gavin Newsom and the California legislature continue to promote policies that they can clearly see aren’t working? When will they take our concerns and our challenges seriously?

The time for change is now. Refuse to let the California government and its leadership blame-shift for the problems we’re facing and call out their gross incompetence in creating this crisis in our state in the first place.

References:

[1] CalFire, “Palisades Fire: Incident Update on 01/16/2025 at 2:29 PM,” January 16, 2025, https://www.fire.ca.gov/incidents/2025/1/7/palisades-fire/updates/a88f80a3-69d5-4e93-9751-18ce907d2865.

[2] CalFire, “Eaton Fire: Incident Update on 01/16/2025 at 3:56 PM,” January 16, 2025, https://www.fire.ca.gov/incidents/2025/1/7/eaton-fire/updates/94aaedf4-c4f6-4a08-b42b-bfa9265f5dd6.

[3] Ortiz, Erik. “Residents Face Major Insurance Challenges After L.A. Wildfires,” January 12, 2025. https://www.nbcnews.com/news/us-news/los-angeles-wildfires-rage-as-homeowners-battle-insurance-crisis-rcna186783.

[4] Darmiento, Laurence, and Summer Lin. “They Lost Their Home Insurance Policies. Then Came the L.A. Fires - Los Angeles Times.” Los Angeles Times, January 13, 2025. https://www.latimes.com/business/story/2025-01-12/california-homeowners-are-getting-cancelled-by-their-insurers-and-the-reasons-are-dubious.

[5] Lara, Ricardo. “Prop 103 Consumer Intervenor Process.” California Department of Insurance, n.d. https://www.insurance.ca.gov/01-consumers/150-other-prog/01-intervenor/.

[6] Habegger, Becca. “California Dept. Of Insurance to Crack Down on Deadlines.” ABC 10, August 12, 2024. https://www.abc10.com/article/news/local/wildfire/california-dept-of-insurance-to-crack-down-deadlines/103-3dba25c4-92f4-484b-8d1c-e0b399c942e9#:~:text=Under%20Prop%20103%20%E2%80%94%20passed%20by,Deputy%20Insurance%20Commissioner%20for%20Communications.

[7] Sperry, Ben. “The Questionable Value of California’s Rate Intervenors - International Center for Law &Amp; Economics.” International Center for Law & Economics, August 12, 2024. https://laweconcenter.org/resources/the-questionable-value-of-californias-rate-intervenors/.

[8] Ibid.

[9] Jimenez-Sanchez, Kassandra. “New Reinsurance Regulation Launched to Increase Home Insurance Access in California Wildfire-risk Areas.” ReinsuranceNe.ws, December 31, 2024. https://www.reinsurancene.ws/new-reinsurance-regulation-launched-to-increase-home-insurance-access-in-california-wildfire-risk-areas/.

[10] Bourne, Ryan, and Sophia Bagley. “California Insurance Market: Another Victim of the War on Prices.” Cato Institute, January 10, 2025. https://www.cato.org/blog/california-insurance-market-another-victim-war-prices.

[11] National Association of Insurance Commissioners. “Insurance Topics | Catastrophe Models (Property) | NAIC,” March 20, 2024. https://content.naic.org/insurance-topics/catastrophe-models-%28property%29#:~:text=Cat%20Model%20Basics:%20Catastrophe%20models,living%20expenses%2C%20and%20business%20interruption.

[12] Vives, Ruben. “State Farm Won’t Renew 72,000 Insurance Policies in California - Los Angeles Times.” Los Angeles Times, March 25, 2024. https://www.latimes.com/california/story/2024-03-23/state-farm-wont-renew-72-000-insurance-policies-in-california-worsening-the-states-insurance-crisis.

[13] Ibid.

[14] Dumas, Breck. “California Insurance Crisis: List of Carriers That Have Fled or Reduced Coverage in the State.” Fox Business, January 10, 2025. https://www.foxbusiness.com/lifestyle/california-insurance-crisis-here-carriers-have-fled-reduced-coverage-state.

[15] Nguyễn, Trân, and Stefanie Dazio. “California Will Soon Require Insurers to Increase Home Coverage in Wildfire-prone Areas | AP News.” AP News, December 30, 2024. https://apnews.com/article/california-increases-home-insurance-wildfires-56486f80c0f5f5e63b90db06d230f1d1.

[16] Bourne and Bagley, “California Insurance Market: Another Victim of the War on Prices.”

[17] Habegger, “California Dept. Of Insurance to Crack Down on Deadlines.”

[18] Ibid.

[19] Sanchez, Dieter. “Business Insurance | Personal Insurance | Inszone Insurance.” Inszone Insurance, January 8, 2025. https://inszoneinsurance.com/blog/understanding-the-california-fair-plan.

[20] Oh, Sangmin, Ishita Sen, and Ana-Maria Tenekedjieva. “Pricing of Climate Risk Insurance: Regulation and Cross-Subsidies.” SSRN, January 15, 2021. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3762235.

[21] Flavelle, Christopher. “Home Insurance Rates in America Are Wildly Distorted. Here’s Why.” The New York Times, July 8, 2024. https://www.nytimes.com/interactive/2024/07/08/climate/home-insurance-climate-change.html?

[22] Cappelletti, Anthony. “Property Insurance in California and Florida: A Problem of Availability and Affordability | SOA.” Society of Actuaries, June 2024. https://www.soa.org/publications/gi-insights/2024/june/gii-2024-06-cappelletti-2/#:~:text=The%20government%20of%20California%20strictly,the%20filed%20rates%20are%20approved.

[23] Rabb, William. “Florida Commission Accepts Three New Flood Models as Storm Impacts Rise.” Insurance Journal, November 14, 2024. https://www.insurancejournal.com/news/southeast/2024/11/14/801064.htm#:~:text=Having%20more%20than%20one%20model%20has%20been,more%20computer%20models%20approved%20by%20the%20commission.

[24] Todoroff, Natalie. “Rising Tides and Insurance Costs: Coastal Homeowners Navigate High Coverage Costs.” Bankrate, December 14, 2023. https://www.bankrate.com/insurance/homeowners-insurance/coastal-homeowners-insurance/#insurance-companies-response-to-climate-related-disasters.

[25] Farmer, Liz. “How California and Florida Are Trying to Stave off the Home Insurance Crisis.” Route Fifty, November 1, 2023. https://www.route-fifty.com/finance/2023/11/how-california-and-florida-are-trying-stave-home-insurance-crisis/391684/.

[26] Ibid.